Books of X. Ltd. Journal
Date	Particulars					L.F.	Debit Amount ₹	Credit Amount ₹
	Bank A/c				Dr.		16,50,000
		To 10% Debentures A/c						15,00,000
		To Securities Premium A/c						1,50,000
	(Issued 15,000, 10% debentures of ₹ 100 each at 10% premium)


X Ltd.
Balance Sheet
Particulars			Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Reserves and Surplus			1	1,50,000
2. Non-Current Liabilities
a. Long-Term Borrowings			2	15,00,000
3. Current Liabilities
Total				16,50,000

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents			3	16,50,000
Total				16,50,000

ACCOUNTNOTES

(ii)


	Bank A/c			Dr.	14,25,000
	Discount on Issue of Debentures A/c			Dr.	75,000
		To 10% Debentures				15,00,000
	(Issued 15,000 10% Debenture of ₹ 100 each at 5% discount)


X Ltd.
Balance Sheet
Particulars			Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholder’s Funds
2. Non-Current Liabilities
a. Long-Term Borrowings			1	15,00,000
3. Current Liabilities
Total				15,00,000

II. Assets
1. Non-Current Assets
a. Other Non-Current Assets			2	75,000
2. Current Assets
a. Cash and Cash Equivalents			3	14,25,000
Total				15,00,000

ACCOUNTNOTES

Note No.	Particulars	Amount (₹)

1	Long-Term Borrowings
	10% Debentures (Secured)	15,00,000

2	Other Non-Current Assets
	Discount on Issue of Debentures	75,000

3	Cash and Cash Equivalents
	Cash at Bank	14,25,000

(iii) No entry will be passed for issuing debenturesas a collateral security

ACCOUNTNOTES

Note No.	Particulars	Amount (₹)

1	Long-Term Borrowings
	Bank Loan (Secured against issue Debentures of ₹ 12,00,000)	12,00,000

2	Cash and Cash Equivalents
	Cash at Bank	12,00,000

AlternativeMethod


	Debenture Suspense A/c				Dr.	15,00,000
		To 10% Debentures A/c					15,00,000
	(Issued 15,000 10% Debentures of ₹ 100 each as collateral security to bank against a loan of ₹ 12,00,000)


X Ltd.
Balance Sheet
Particulars			Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Fund
2. Non-Current Liabilities
a. Long-Term Borrowings			1	12,00,000
3. Current Liabilities
Total				12,00,000

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents			2	12,00,000
Total				12,00,000

ACCOUNTNOTES

Note No.	Particulars		Amount (₹)

1	Long Term Borrowings
	Secured:
	Bank Loan		12,00,000
	10 % Debentures (Secured against issue of Debentures of ₹ 12,00,000)	15,00,000
	Less: Debenture Suspense Account	15,00,000	–
			12,00,000
2	Cash and Cash Equivalents
	Cash at Bank		12,00,000

(iv)


	Machinery A/c		Dr.	13,50,000
		To Vendor A/c			13,50,000
	(Machinery purchased from vendor)

	Vendor A/c		Dr.	13,50,000
	Discount on Issue of Debentures A/c		Dr.	1,50,000
		To 10% Debenture A/c			15,00,000
	(15,000 10% Debentures @ ₹ 100 each issued at 10% discount to the vendor in consideration of Machinery of ₹ 13,50,000)


X Ltd.
Balance Sheet
Particulars			Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
2. Non-Current Liabilities
a. Long Term Borrowings			1	15,00,000
3. Current Liabilities
Total				15,00,000

II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets			2	13,50,000
b. Other Non-Current Assets			3	1,50,000
2. Current Assets
Total				15,00,000

ACCOUNTNOTES

Note No.	Particulars	Amount (₹)

1	Long Term Borrowings
	10% Debentures (Secured)	15,00,000

2	Tangible Assets
	Plant and Machinery	13,50,000

3	Other Non-Current Assets
	Discount on Issue of Debentures	1,50,000

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